Federal Salary Council member Rex Facer speaks June 13 at a panel discussion on federal pay. (Thomas Brown / Staff)

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The federal government must reclassify some employees to lower pay grades to correct grade creep, a top presidential adviser on federal pay said Wednesday.

Rex Facer, a member of the Federal Salary Council, also questioned whether it still makes sense to give all federal employees the same base pay raise each year.

Facer and the rest of the Federal Salary Council — a nine-member group of labor relations and pay experts and federal employee representatives — study how federal and nonfederal pay compares each year and then advises the president on how big of a raise to give to federal employees.

Facer spoke Tuesday at a panel discussion on federal pay with American Enterprise Institute scholar Andrew Biggs and Joseph Kile, assistant director for macroeconomic studies at the Congressional Budget Office. Facer’s Federal Salary Council has consistently found federal employees are paid far below their private-sector counterparts, and last year found the pay gap expanded to 26.3 percent. But AEI and other conservative and libertarian groups have produced several studies that concluded feds are vastly overcompensated when compared to private-sector workers. And in January, CBO issued its own study that found feds earn 16 percent higher pay and benefits than employees in the private sector.

Facer, who is also an associate professor of public finance and management at Brigham Young University’s Marriott School of Management, said the government must be willing to reconsider its pay strategies and update them when necessary.

“There are all kinds of political reasons why we do some of these things,” Facer said. “We need to be willing to have all of those kinds of issues on the table to make sure that we’re getting at the right place” when compensating government employees.

Facer said that studies have consistently shown that grade creep — the tendency to gradually assign higher pay grades to jobs over time — is a problem in the government. To fix this, the government should regularly re-examine its employees’ grade levels to make sure their level of responsibilities still matches their pay. If a particular job’s grade has crept up as the years passed — or if a job has grown significantly simpler — the government may need to reclassify it into a lower grade.

But that will not be easy, he said.

“Being an employer that has a couple of million folks on its payroll, that is a very monumental task to do on a regular basis,” Facer said. “But that’s what good compensation systems do.”

Biggs, who studies federal compensation, supports a pay-for-performance system for the federal government.

“Ultimately, people should be paid for their productivity,” Biggs said.

But Facer said the federal government’s past experiments with pay-for-performance have often been hampered by underfunding.

Ron Sanders, an executive adviser at Booz Allen Hamilton who was in the audience of the panel discussion, said he has started working with the Partnership for Public Service and other federal personnel experts on a “blueprint for civil service modernization.”

Sanders, the former chief human capital officer for the intelligence community, said he hopes to have that blueprint ready in time for either President Obama’s second term or Mitt Romney’s administration.